Former president Suharto, the dictator who held an iron grip on Indonesia for 32 years, died of multiple organ failure yesterday in a Jakarta hospital, with his six children at his bedside.

The 86-year-old former general, who was cast from office a decade ago by an economic crisis that sparked riots and street protests, was taken to hospital in a critical condition three weeks ago with heart, lung and kidney problems.

His eldest daughter, Siti Hariyanti "Tutut" Rukama, broke down in tears as she spoke outside the hospital. "Father has returned to God," she said. "We ask that if he had any faults, please forgive them ... may he be absolved of all his mistakes."

Indonesia's president, Susilo Bambang Yudhoyono, broke the news in a televised address to the nation, which is to observe a week of mourning after the funeral today in the royal city of Solo, central Java.

"I invite all the people of Indonesia to pray that may the deceased's good deeds and dedication to the nation be accepted by Allah the almighty," he said. "Suharto has done a great service to the nation."

The president and his deputy, Yusuf Kalla, paid their respects, kneeling before Suharto's body shrouded in white at his home in Jakarta. Hundreds of Indonesians crowded the streets outside, weeping and chanting verses from the Qur'an.

The former prime minister of Singapore, Lee Kwan Yew, and Malaysia's former leader, Mahathir Mohamad, flew to the capital, paying tribute to his part in bringing stability and economic growth.

Suharto held no political power but his legacy cast a long shadow in the deferential nation of 240 million. In a measure of his lingering influence, a court in 2006 awarded him £50m in damages against Time magazine, which accused him of appropriating £7.5bn of government funds. Last year the UN and the World Bank put Suharto top of the world's most corrupt leaders, quoting a Transparency International estimate that he embezzled up to £17.5bn.

Indonesian courts dropped criminal proceedings against him in 2006 saying he was too ill to face trial. Yet even as corruption cases faltered, Indonesia's national commission on human rights three months ago said it was examining human rights abuse actions against him.